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Blistering Treasury Auction: Record Foreign Central Bank Demand For 30 Year Paper

Tyler Durden's picture




 

We had to triple check the Indirect print in today's 30Y auction, because at first it seemed the US Treasury had made a huge mistake, but the number showing that the Indirect take down in today's auction was a whopping 66% - this was the highest take down on record, and may have put an end to any concerns that foreign central banks have no interest in US paper, if only in the primary market (and only for the time being).

Indeed, while some were looking at the repo rate on the 30Y which was solidly positive this morning, and were expecting a poor, tailing yield, not only did this not happen, but the high yield print of 2.98% stopped 0.6 bps through the When Issued. The Bid to Cover likewise was a whopping 2.536, the highest in 2015. Directs and Dealers ended up with 7.4% and 26.6% of the auction, with the Dealer take down the 3rd lowest in history.

 

But once again it was the Indirect bid that was unprecedented, and begs the question: are EM central banks only unwinding reserves, i.e., selling, that are Off The Run only while purchasing OTR securities in any given auction, in an attempt to shore up liquidity? We expect the answer will be known in a few weeks time.

 

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Thu, 09/10/2015 - 13:14 | 6531763 RawPawg
RawPawg's picture

 just a black swan,false flag folks...keep moving

Thu, 09/10/2015 - 13:22 | 6531799 coinhead
coinhead's picture

What a bunch of morons, "let's buy 30 year bonds in country that probably won't exist in 3"

Thu, 09/10/2015 - 14:08 | 6532014 Manthong
Manthong's picture

..seems like a great deal to me seeing as how the fiat FRN fake dollar has less than half the value it had 30 years ago.

Inflation Calculator

http://www.in2013dollars.com/1985-dollars-in-2015?amount=100#

$100 in 1985 ? $222.99 in 2015

Between 1985 and 2015, the United States saw inflation at an average rate of 2.71% per year.

The miracle of compounding.. but in reverse.

Thu, 09/10/2015 - 13:24 | 6531805 Dobermann
Dobermann's picture

About the bond selling in China or what false flag?

Just a few of suckers Hedge Fund buying bonds to get liquity.

Thu, 09/10/2015 - 13:17 | 6531771 inevitablecollapse
inevitablecollapse's picture

hey, we're good for it...right?!

Thu, 09/10/2015 - 13:18 | 6531775 DocMims
DocMims's picture

They got the heads up on the Federal Reserve rate increase, so they want dollars.

Thu, 09/10/2015 - 13:18 | 6531778 viahj
viahj's picture

I wonder if we'll see that it was the Peoples Bank of Ghana that purchased 15x GDP in UST paper.

Thu, 09/10/2015 - 13:20 | 6531784 Soul Glow
Soul Glow's picture

China dumps $200B of USTs in AUgust then goes back into the market the next month.  What this tells us is that no one understands what they are doing.

All falls down.

:)

Thu, 09/10/2015 - 13:26 | 6531807 Dr. Engali
Dr. Engali's picture

China has direct access to the treasury for buying paper. Looks to me like someone is picking up their slack.

Thu, 09/10/2015 - 13:29 | 6531839 Soul Glow
Soul Glow's picture

Let's also note since the indirect bid was high, the direct bid was low, meaning JPM et al were less active during the auction.

Thu, 09/10/2015 - 13:24 | 6531791 clade7
clade7's picture

I got some 30 yr old paper around here someplace, my highschool yearbook, wedding license, and my daily driver owners manual to name a few....its a Slant 6 225 Plymouth Volare wagon for you home gamers out there..

Thu, 09/10/2015 - 13:25 | 6531811 Dragon HAwk
Dragon HAwk's picture

30 year paper, hell i think i got some  Zig Zag rolling  paper laying around since High School.. probably went up in value as well..

Thu, 09/10/2015 - 13:32 | 6531853 Consuelo
Consuelo's picture

Ah the days...

 

Rolling yer own, the old man snarling - calling 'em all lazy 'dopeheads' (and still does to this day), threatening that if he ever caught me with anything like that I'd be outta his house on my can (when smoking pot or even a cigarette was the furthest thing from my mind, etc.) 

The damage done by 'Refer Madness' carries on to this day...

 

 

Thu, 09/10/2015 - 13:30 | 6531844 explosivo
explosivo's picture

Isn't the Fed just pushing their purchases through other central banks?

Thu, 09/10/2015 - 13:33 | 6531859 lasvegaspersona
lasvegaspersona's picture

Those that know don't say, those that say....

Thu, 09/10/2015 - 13:33 | 6531858 LawsofPhysics
LawsofPhysics's picture

LOL!!!  fear, specifically, people considering the return of their capital versus the return on their capital...

 

Hey maybe the Fed can finally sell some of their government paper!!!

Thu, 09/10/2015 - 13:41 | 6531888 Kaiser Sousa
Kaiser Sousa's picture

bullshit....

Thu, 09/10/2015 - 13:50 | 6531919 Two Theives and...
Two Theives and a Liar's picture

Quantitative Tightening...Schiff was talking about this...interesting. Rates may go up regardless of what Ol' Yeller does (or does not do).

Of course they could just unplug the "market" until it does what they want.

Thu, 09/10/2015 - 13:54 | 6531941 youngman
youngman's picture

Yes you think with the market so hot on these bonds that the fed could sell a bunch of what they own to lower their balance sheet.....but we all know its fake....

Thu, 09/10/2015 - 14:31 | 6532147 silverer
silverer's picture

To the foreign governments: Hey, I have some land in Florida you'd be interested in, too...

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